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Overview

On June 29, 2017, the Task Force on Climate-related Financial Disclosures (TCFD) set up by the Financial Stability Board (FSB) to develop voluntary, consistent climate related financial risk disclosures for use by companies in providing information to lenders, insurers, investors and other stakeholders published its final recommendations for effective disclosure of climate-related financial risks.

The final report follows on a consultation document published in December 2016. The consultation document saw 320 unique responses from respondents in 30 countries, including 15 of the G20 jurisdictions. The four widely adoptable recommendations on climate-related financial disclosures that are applicable to organizations across sectors and jurisdictions were widely supported and remain unchanged:

- Governance: Disclosure of the organization’s governance around climate-related risks and opportunities

- Strategy: Disclosure of the actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning

- Metrics and targets: Disclosure of the metrics and targets used to assess and manage relevant climate-related risks and opportunities.

Key features of the recommendations are that they are adoptable by all organizations, should be included in mainstream financial filings, are designed to solicit decision-useful, forward-looking information on financial impacts, and have a strong focus on risks and opportunities related to the transition to a lower-carbon economy. The TCFD also recommends the disclosure of potential impacts of climate-related risks and opportunities under different potential scenarios, including a 2° Celsius scenario.

Other de­vel­op­ments

June 2017

On June 29, 2017, the TCFD pub­lished its final report on rec­om­men­da­tions for ef­fec­tive dis­clo­sure of cli­mate-re­lated fi­nan­cial risks

December 2016

On December 14, 2016, the TCFD published a consultation paper with recommendations for effective disclosure of climate-related financial risks. The draft recommendations are open for public consultation for 60 days.